Sort out your Christmas spending now

12:26 - 16 Sep 2013

It’s 100 days until Christmas TODAY, so we should all start to sort out what we’re doing, according to our Money Saving Expert Martin Lewis.

Don’t worry, the last thing I want is for you to start putting up baubles and for shops to start playing Jingle Bells in September. But Christmas is a major expenditure, so planning now to ensure no New Year hangover is crucial. Here are my key tips:

Don't pay for Christmas from December's income
Never just plot a Christmas lust-list of everything you want. A typical family's Christmas spending is £835, too much for December's income alone. So work out now what you can afford to put aside in September, October, November and December. Once you know how much you've got, ask: "What's the best possible Christmas we can have on that?"

Free £100 Amazon voucher in time for Christmas.
If you’re going to spend for Christmas, then at least make it work for you. There a couple of key options for doing this…

The Amex Preferred Rewards Gold card charge card gives accepted customers who spend £2,000 on it within three months 20,000 bonus reward points – convertible into a £100 Amazon voucher. The points arrive as soon as you hit £2,000, so if your normal spending would cover that, just do it on the card and bingo, free Amazon voucher for Xmas.

However as this is a charge card (min income £20k), it’s designed to be fully repaid each month, so there's no interest. Fail to do that, and you get a £12 charge and credit file default. The card's fee-free in year one, but £125 annually after, so if you don't want to pay that, cancel before then.

Cashback credit cards pay you each time you spend on them. So do normal spending and set up a direct debit to repay IN FULL each month to avoid interest and you're quids in. The cashback is usually paid on the anniversary of opening the account. Top cards out there at the moment include:

The Amex Platinum Everyday card (min income £20,000) pays a HUGE 5% back, up to £100, on ALL spending in the first 3 months, then up to 1.25%. Though fail to fully repay and it's 19.9% rep APR.

If you don’t want, or can’t get the Amex card, then both Tesco and M&S have cards that give up to 1% back in points, not cash – though again, fail to repay in full and they’re both 16.9% rep APR respectively.

Use three golden numbers – 100, 70 and 14
Small sacrifices can save you large. Walk, instead of taking the £1 bus every day, and you could save £1 x 100 before Christmas. Buy a £2 coffee every WORKING day and if you gave it up you could save £2 x 70 = £140, or do something weekly and multiply it by 14. I'm not saying you have to give it up, just work out which use of cash gives you more joy.

Don't borrow for Christmas, but if you do, ensure it's 0%
Christmas borrowing's a bad idea. Far better to go, er, cold turkey, and have a more austere time (Christmas is just one day, after all). Yet if you'll borrow anyway, at least do it right. The cheapest way is on a 0% SPENDING card, as done right, it’s interest-free. The longest is Tesco’s 18 months at 0%. Yet even though it lasts more than a year (provided you make the min repayments), plan to clear it before next Xmas or you'll compound your problems. If you don't clear before the 0% ends, beware - it'll jump to 16.9% representative APR.

Got it and don't need it? Flog it now for fast cash
Many old items can be worth serious cash. Online auction giant eBay usually fetches maximum cash. But if you want speed and ease, use a comparison site to find the top online buyers for old mobiles and gadgets.

Set up a Christmas cupboard, then POUNCE on the biggest discounts
Don't waste time and money, be a tactical Christmas shopper. Decide what you want, make a list, get a Christmas cupboard ready to put stuff in, then wait until what you're buying's at the cheapest price. Keep an eye out for codes, vouchers and one-day sales to find those kick-bum prices.